Investors await details of new US sanctions on Iran, weighing on risk sentiment and supporting the Euro near three-month highs.
The Euro traded above 1.1650 against the US Dollar on Monday, retaining most of last week’s gains despite minor losses. Markets remained cautious ahead of a new set of US sanctions targeting Iran, which could escalate geopolitical tensions and disrupt oil supplies.
US Treasury Secretary Scott Bessent indicated the measures would be the “single greatest offensive ever” against Iran, aiming to cut off its economic lifelines. Tehran has threatened to halt Gulf oil exports and warned collaborating nations of treating sanctions as an “act of war.”
Oil prices dipped 1.5% from Friday’s highs, while strategists noted resurgent USD debasement fears following the US Treasury’s expanded long-end buyback program. The move has fueled speculation of a weaker Dollar and higher inflation expectations.